Factory Records

Lore & Background

The Factory name was first used for a club in May 1978; the first Factory night was on 26 May 1978. The club became a Manchester legend, being known variously as the Russell Club, Caribbean Club, PSV Club, and 'The Factory'. The 'Factory' night at The Russell Club was launched by Alan Erasmus, Tony Wilson, and helped by promoter Alan Wise. As well as attracting numerous touring bands, it featured local bands including the Durutti Column, Cabaret Voltaire, and Joy Division. Peter Saville designed advertising for the club, and in September Factory released an EP of music by acts who had played at the club called A Factory Sample.

As a follow-on from the successful 'Factory Nights', Factory Records made their first release, A Factory Sample, in December 1978. After his seminal TV series So It Goes, Tony Wilson was convinced that the real money and power were in album sales. Producer Martin Hannett, who worked with Factory from the start, helped shape the label's sound, but he was not from Rabid Records.

Reader's Guide

Factory Records was a defining force in British independent music, originating from the post-punk scene in Manchester. Its significance lies in its roster of influential acts—Joy Division, New Order, Happy Mondays—and its role in creating the Madchester cultural hub around The Haçienda nightclub. The label's unique cataloguing system, which assigned numbers to everything from records to Wilson's coffin, reflected its unconventional ethos. Despite commercial successes like New Order's 'Blue Monday', the label's financial mismanagement, including high production costs and low club prices, led to its bankruptcy in 1992. Its legacy endures through the music, the club's cultural impact, and the 2002 film 24 Hour Party People, which chronicled its rise and fall. The label's creative team of Martin Hannett and Peter Saville gave its releases a distinctive sound and image that influenced generations of musicians and designers.

Did You Know?

• Factory Records assigned catalogue numbers not just to musical releases but also to artwork, films, living beings, and Tony Wilson's own coffin.
• The label lost money on every copy of New Order's 'Blue Monday' because the die-cut sleeve designed to look like a floppy disk was so costly to produce.
• The Haçienda nightclub lost tens of thousands of pounds every month due to low entrance and bar prices, and later because crowds preferred ecstasy to alcohol.
• Factory Communications Ltd declared bankruptcy in November 1992 after New Order's back catalogue was owned by the band rather than the label due to early contract practices.

Origins: From Club Night to Label

The Factory name first appeared not as a record label but as a club night at the Russell Club in May 1978. Alan Erasmus, Tony Wilson, and promoter Alan Wise launched what became a Manchester institution, drawing touring acts and local post-punk bands like the Durutti Column, Joy Division, and Cabaret Voltaire. The venue itself carried a colorful past—originally a social club for bus drivers working from a nearby depot, it cycled through several names before settling on 'The Factory.' Peter Saville designed the advertising, and in September 1978 the group released 'A Factory Sample,' an EP of music from acts who had played the club. The formal label structure grew out of Wilson's admiration for Rabid Records, a punk outfit run by Tosh Ryan and Martin Hannett. After observing how Rabid operated following Wilson's TV series So It Goes, he became convinced that album sales held the real power. With Rob Gretton and Erasmus, Wilson established Factory Records, bringing Hannett aboard. The office was modest: a first-floor room at 86 Palatine Road, Erasmus's home. The first LP, Joy Division's Unknown Pleasures, arrived in June 1979.

Creative Identity and the FAC System

Factory Records distinguished itself through an integrated creative vision. Producer Martin Hannett and graphic designer Peter Saville shaped both the sound and visual language of every release, giving the label and its artists a recognizable aesthetic. Equally distinctive was the cataloguing system: rather than numbering only musical recordings, Factory extended its FAC codes to artwork, films, living beings, and even Tony Wilson's own coffin. This treated the label as a total cultural organism rather than a mere distribution vehicle. The system reached its most iconic expression with New Order's 'Blue Monday' (FAC 73) in 1983. Saville designed the sleeve as a die-cut floppy disk replica, a bold conceptual choice nobody at Factory anticipated would become a global chart hit. Production costs were so high the label lost five pence per copy sold. Saville recalled that no one expected commercial success, so the expense never registered as a concern. Hannett departed in 1981, wanting to open a studio; his unpaid-royalties dispute was settled out of court in 1984. Saville also quit as a partner over payment issues but continued working with Factory.

The Haçienda and the Madchester Scene

In 1981, Factory and New Order began converting a Victorian textile factory—recently used as a motor boat showroom—near Manchester's city center. The result, The Haçienda (FAC 51), opened in May 1982 with Ben Kelly's celebrated interior design. Attendance was strong and critical praise followed, but the economics were brutal. Entrance fees and bar prices were set well below those of nearby pubs, a deliberate choice to keep the space accessible. By the mid-1980s, the crowd's preference had shifted from alcohol to ecstasy, further eroding revenue. The club bled tens of thousands of pounds monthly, and raising bar prices proved insufficient. Despite the financial hemorrhage, the Haçienda became the gravitational center of the 'Madchester' scene, where techno, acid house, and post-punk guitar music fused into something new. Happy Mondays released their debut album in 1985, and alongside New Order they became the label's most commercially vital acts, effectively bankrolling the wider roster. Factory also extended its physical presence into Manchester's Northern Quarter with The Dry Bar (FAC 201) and The Area shop (FAC 281).

Roster, Loss, and Institutional Growth

Factory's roster read like a who's-who of British alternative music: Joy Division, New Order, A Certain Ratio, the Durutti Column, Happy Mondays, Northside, and briefly Orchestral Manoeuvres in the Dark and James. The label's trajectory was shaped by tragedy as much as triumph. In May 1980, Joy Division's Ian Curtis took his own life just before a planned American tour. The following month, 'Love Will Tear Us Apart' cracked the UK top twenty, and their final album Closer was released. The surviving members reformed as New Order, carrying the label's creative momentum forward. Vini Reilly's Durutti Column delivered a long stream of releases beginning with The Return of the Durutti Column in January 1980. Factory also expanded geographically: Factory Benelux operated as an independent label in partnership with Les Disques du Crepuscule, while Factory US handled American distribution. By 1989 the roster had stretched to include fringe punk folk act To Hell With Burgundy. In September 1990, the label moved into dedicated headquarters at FAC 251 on Charles Street, near the Oxford Road BBC building, marking a new institutional chapter after years of operating from a spare room.

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